How Solar PV Can Contribute to Africa s Energy Transition

Transcription

1 How Solar PV Can Contribute to Africa s Energy Transition Andrea Orzan Director of Business Development for Africa How Solar PV Can Contribute to Africa s Energy Transition

2 Agenda Introduction to SunEdison Global Trends in Solar Energy Solar PV Energy in Africa

3 Introduction to SunEdison

4 Diversified Business Segments Utility Scale Commercial Rooftops Residential & Small Systems Off-Grid & Hybrid Systems Large scale groundmount projects Distributed generation for Utilities Development, engineering, construction and O&M services Construction and long-term financing Premium guarantees Some 100 kw -1 MW Commercial and Industrial Rooftops Systems Integrators for PV Rooftops owned by building owners, funds PPA programs for different hosts: commercial, industrial, public sector Below 100 kw Residential and Small Commercial Based on a Certified Installers Program Premium customer services: training, logistic, financing, software, after-sales Can be any size For public and private customers Standalone or Hybrid Solutions PPA or system sale

5 Agenda Introduction to SunEdison Global Trends in Solar Energy Solar PV Energy in Africa

6 Solar Leading Global Energy Transformation Cumulative Solar PV Installations GW By 2010, the world had installed more solar PV than SSA s entire power capacity (excl. SA) Solar PV penetration Germany: in May 2012, 10% of demand was met by solar PV; in October 2013, that figure was 11.2% (and wind and solar combined 36.4% Italy: in August 2012, 8.4% of demand was met by solar PV Global Commitments to Solar PV California: 33% RPS China: 50 GW Saudi Arabia: 41GW India: 20 GW Sources: IMS Research, wikipedia, BDEW

7 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4E 1QE 2QE 3QE 4QE Solar Costs Have Dramatically Come Down $4.00 $3.00 $2.00 Module ASP PV Module vs. BoS Cost Module BoS Module ASPs dropped by 80% in 4 years PV modules were ~2/3 rd of the system cost in 2008; nowadays they are only ~1/3 rd Higher module efficiency reduces BoS costs efficiency is increasingly more important $ $ Sources: Module ASP blended average of prices reported by top tier suppliers.

8 Transition to Incentive-Free Markets Historic Subsidy-driven Solar Markets Past Transition period 2-5 years Markets enabled through public policy measures E.g. ITC, FiTs, ROCs, GCs, tenders, etc. Over 100 GW of PV installed worldwide Future Economy-driven Electricity Markets Future Countries with (a) large electricity markets and (b) high irradiation levels Also markets with new generation capacity needs (growth or substitution) Countries at grid parity (segment-dependent) Political support still expected Potential market = Millions of people, huge annual electricity demand Sources: IHS, EPIA

9 Agenda Introduction to SunEdison Global Trends in Solar Energy Solar PV Energy in Africa

10 Debunking Solar Energy Myths SOLAR ENERGY MYTHS REALITY 1. Prohibitive Cost Solar PV is competitive in the Distributed Generation (DG), Off-Grid, Hybrid, and other segments. 2. Unreliable Technology Crystalline silicon technology has more than 40 years of experience. 100GW of installed capacity exists. 3. Unpredictable Intermittency Solar energy is very predictable: with an average annual variability of +/-5% 4. Difficult to Finance Solar PV today is a USD 100 billion market. Sponsor selection is the key. 5. PV Causes Grid Instability Renewable penetration in Germany represents 25% of the total and has reached in excess of 50%. Incidentally, the German grid is also the one with the least down-times in the UE (15-20 minutes.)

11 Power Is A Major Problem in Africa... Insufficient & obsolete power generation & transmission Lowest electrification rates in the world: 30.5% in SSA million people with no access to electricity Low installed capacity: 34.2 GW installed capacity in SSA (excl SA*) with a population of 860 million roughly the same as Argentina with 41 million inhabitants Unreliable provision: the World Bank reports that African manufacturing enterprises report power outages an average of 56 days a year source, and that lack of power the single greatest source of lost productivity in African business Growing energy demand GDP growth: GDP has grown on average 5% over the past 10 years (vs. world average of 2.6%) Consumption outstrips installed based growth: net energy consumption has grown at a CAGR of 5.6% vs. 2.4% growth in installed capacity over the past decade Power infrastructure gap: power infrastructure spending needs were estimated at 42.6 billion USD/year (including capex and opex), compared to existing spending of 13.8 billion USD/year (Briceño-Garmendia and others, 2008) *SSA had 78.5 GW of installed capacity in 2010 of which 44.3 in South Africa only Sources: World Bank

12 ..And Solar PV is An Attractive Solution Economically competitive already, due to High irradiation, with yields ranging from 1,750 to in excess of 2,200 kwh/kwp High energy costs*: in SSA, the average tariff is 0.13 US$/kWh vs US$/kWh in the developing world; in countries dependent on diesel-based systems, tariffs are higher still Easy & fast deployment Fast deployment: up to 20 MW/mth construction velocity Scalable: from 1 kwp to 1 GWp, all sizes are possible Deployable at point of consumption Sustainable Solar energy is fueled by the endless Sun Clean & Safe No green-house gas emissions; negligible use of water, no explosive or hazardous materials Simple & Worriless Simple operation, negligible O&M costs Highly Predictable Solar output can be accurately forecasted

13 Historical Evolution of the Electricity Industry * Gen - IPPs Transmission - Public Generation Expansion Transm. Expansion Distrib. Expansion Liberalization Distribution - DISCOs Ancillary - Private * Page 13 Title:"Final Report on the August 14, 2003 Blackout in the United States and Canada" Dated April Regulator - Public

14 Typical Structure Centralized generation Redundancies Centralized generation Redundancies Grid-connected renewables Distributed generation Smart metering Grid balancing Demand management

15 Africa Paradigm Leapfrogging Again? Generation Expansion Transm. Expansion Distrib. Expansion Gen - IPPs Liberalization Transmission - Public Distribution - DISCOs Issues: Few assets to liberalize The real asset is demand unmet demand Transmission remains public but w/out funding to expand Utilities are loss-making Ancillary - Private Regulator - Public Transmission is a major bottleneck

16 Africa Paradigm - Evolution CURRENT FIRST PHASE SECOND PHASE Limited centralized generation Captive generation Off-grid customers with no access Limited grid-connected renewable generation Distributed generation off-grid Captive hybrid distributed generation Limited grid-connected renewable generation Distributed generation off-grid Captive hybrid distributed generation Injection into newly extended grid

17 Africa Paradigm Benefits and Risks Demand can be met in short time Lower short term cost than grid expansion Lower cost and greater ease of operation and maintenance Not all areas will be grid connected Perception of energy quality differentiation Difficult to manage as system

18 One Often Forgotten Key Element LCOE (US$/MWh) % -13% X Y Z

19 Opportunities for Solar PV in Africa I. SOLAR IS TODAY COMPETITIVE IN MANY INDUSTRIAL AND RESIDENTIAL SEGMENTS. PV prices today compete with distribution tariffs. II. III. IDEAL SOLUTION FOR OFF-GRID AREAS/CLIENTS: costs, ease of construction, scalability and lifetime of PV technology make it the best option for rural electrification. PV - HYBRID SOLUTIONS are a perfect complement to MINING AND OTHER INTENSIVE ENERGY USERS in areas of weak or intermittent grid provisioning. IV. High predictability of PV energy: EXCELLENT COMPLEMENT TO HYDRAULIC ENERGY (in, for example in periods of draught when energy prices shoot up.) V. SOLAR ENERGY ENABLES CAN HELP SHIFT GAS FROM CONSUMPTION to sale on international markets.

20 Questions and Contact information For any additional information, contact Andrea Orzan: Mobile: